A cooler way to run a company

If the soul of small business is efficiency, then Cooler Email Inc. may serve as the Platonic ideal of small business.

No office, no salaried staff, no copiers, no letterhead. Cooler Email consists of just two partners living in separate cities, a Web site, and a lot of relationships with contractors and sales agents. Don't forget the software that was written, at least in part, on a Southern California beach.

This tiny, virtually overhead-free company started up not quite four years ago, and has doubled its revenue each year. Based on sales so far this year, Cooler Email is on track for $1.5 million in 2004.

Cooler Email is the brainchild of Leif Youngberg, who lives in Portland, and Lars Helgeson, who lives in Cardiff, Calif. That is, he lives there when he isn't traveling to Australia, Fiji, Costa Rica or New Zealand. The two founders were living in New Mexico, running a failing online art sales company, when they decided that they would start up a new business: "anything from tacos to wireless," said Youngberg.

The two partners finally narrowed their choice to creating an inexpensive, quick, easy way for companies to create mass e-mails to send out to customers or prospects. The partners' goal was to create the most secure, most reliable opt-in e-mail system they could, and to create the most efficient company possible to underpin it.

Cooler Email today claims 5,000 active accounts, and some impressive customers: Yahoo Inc., EarthLink Inc. and Columbia Sportswear Co. Cooler Email's platform also underlies e-mails from companies like Microsoft Corp., Intel Corp. and Cingular Wireless, that appear either with the brands of these companies or with the brands of the Cooler Email resellers that designed the e-mails.

Customers are pleased with the system, and with the guys who created it. "I'm a big fan of theirs," said Sarah Harrington, director of marketing communications for Easystreet Online Services Inc.

Harrington has been using the Cooler Email service for the past two years to send out an occasional newsletter, called Idea Exchange, to Easystreet customers and others. While Easystreet chose the Cooler Email product over its competitors "because it was the cheapest," said Harrington, results have proved it was the right choice. Harrington finds it quick and easy to get the newsletter out, and it generates positive responses.

The newsletter is, indeed, inexpensive for Easystreet: Sending out about 1,500 newsletters at a time costs Easystreet about $600 per year, rather than the $1,500 or $3,000 per year that competitors would have charged.

Cooler Email also offers a portal where clients can view the results of their e-mails: how many people opened the e-mail and which articles or other clickable elements were the most popular. Customers can also check how many people visited the company Web site after reading the e-mail, and which portions of the site they visited.

Angela Johnson, president of the Oregon Chapter of the American Marketing Association, uses Cooler Email both to communicate with AMA members, and in her day job at Xenium Resources, a human resources firm. Cooler Email has proved an inexpensive, effective tool for Johnson, and she values its simplicity particularly for AMA's use, as "our board turns over annually, and every year, someone new needs to learn how to use it."

Like Harrington, Johnson is also impressed with Youngberg and Helgeson. "I love them," she said. Whenever she has a question, Johnson calls Youngberg, and she has always been able to reach him. "It's not like another company, where you get handed off to an account executive," she said.

Efficiency and simplicity are the guiding principles not only of the Cooler Email system, but of its very structure. Youngberg and Helgeson do some selling themselves, but for the most part, they rely on about 35 companies that sell Cooler Email's platform as part of their own services, such as Web site design. Some of these are local, such as EROI Inc. or PopArt Inc., but others are located around the United States, and as far afield as the Netherlands, Australia, Mexico and the United Kingdom.

As more resellers came on board, Helgeson and Youngberg found a new efficiency: They designated one of their resellers as the coordinator of the other resellers. Just as resellers have incentive to sell more customers on Cooler Email, so the company's coordinator, who works out of Los Angeles, has incentive to help the other resellers bring in more accounts.

The reseller coordinator is just another example of how Cooler Email's founders manage to devolve functions to others as they grow. The company stores its servers at a data center in San Diego; it pays a professional work force outsource company, WorkSource Inc. in the Pearl District, to answer customer service calls; and recently, to write software code for a new feature, Cooler Email hired a team of software engineers in India.

Outsourcing as much of the company's functions as possible leaves Helgeson and Youngberg free to invent new features, like the plug-in that coordinates Cooler Email's platform with Microsoft's Outlook program, and to develop new business leads. It also leaves them free for other pursuits: Helgeson is an avid mountain biker, traveler and scuba diver. Youngberg, who was recently married, is building a house that he plans to ship in pieces, when it is completed, to wherever he and his wife decide to buy some land.

It all sounds very late 1990s -- the liberation from the strictures of normal office life, the traveling, the meetings via cell phone and e-mail, the coding on the beach. But Youngberg and Helgeson are very serious about their business. They are also serious about building a business of such evident and lasting value that they will one day be able to cash out as millionaires.

"We've already been through the due diligence of the biggest companies out there," said Youngberg. And with a virtual company that has almost no overhead, and huge gross margins, the buyout multiple should be "pretty good," said Youngberg, with a gleam in his eye.

Cooler Email Inc.

Owners: Leif Youngberg, above, and Lars Helgeson.

What we do: Allow clients an easy way to create mass e-mail campaigns that is secure and reliable.

Location: Youngberg works out of Portland, and Helgeson works out of Cardiff, Calif.